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Equity Derivatives Trading

Industry : Equity Research/Analytics Functional Area : Derivatives
Activity:  2 comments  313 views  last activity : 07 06 2010 20:18:04 +0000
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 (SEBI) has introduced mini-contracts in the derivatives markets based on the Sensex and the Nifty indices to attract retail investors into the ever-growing derivatives market.

The step comes in the backdrop of recommendations of the Derivatives Market Review Committee (DMRC) headed by Professor M. Rammohan Rao.

BSE said in a release, “The small size of the contract would be attractive for retail investors as there would be comparatively lower capital outlay, lower trading costs, more precise hedging and flexible trading. It is a step to encourage and enable small investors to mitigate risk and enable easy access to Sensex, through Futures & Options.”

SEBI said that the introduction of these products is a step intended to progressively encourage markets to move onshore.

Its a step  to encourage and enable small investors to mitigate risk and gain easy access to India’s popular index, Sensex, through futures and options

The mini derivative contract on Index (Sensex and Nifty) shall have a minimum contract size of Rs 1 lakh at the time of its introduction in the market. The risk containment and other measures applicable for existing exchange traded equity index derivatives contracts will be applicable to the mini derivative contracts as well, an official release said.

The Security Symbol for SENSEX mini Contracts will be MSX. The contract is available for one, two & three months along with weekly options.

Market watchdog Sebi has approved introduction of seven new derivative products for the domestic market. “The introduction of these products is a step intended to progressively encourage markets to move onshore,” Sebi had said.
The Securities and Exchange Board of India had allowed trading in mini contracts on index with a minimum contract size of Rs1 lakh.
 
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2 comments on "BSE to launch mini contracts in derivative market"
  Commented by  Darpan Sinha, Solution Architect, Fujitsu Consulting India Pvt Ltd    | 09 05 2008 03:08:22 +0000
Good One
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